Funds

Funds

This overview is a guide to the Lexis®PSL Corporate content within the Funds subtopic, with links to the appropriate materials.

What is a fund?

A private equity or venture capital fund is, in broad terms, an unlisted and private pooled investment vehicle typically in the form of a limited partnership (LP).

Each fund is managed by the general partner of the LP or a separate entity controlled by the private equity firm. The general partner/manager is remunerated in the form of:

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annual management fees (usually 1–2% of the committed capital of the fund) to pay for the firm's operational costs, and
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a share (usually up to 20%) of the profits from the fund's realised investments (known as carried interest), payable only when a certain minimum return, or internal rate of return, has been achieved

Any one fund may invest in a number of companies and the ultimate goal of the fund is to sell its investments for a return in excess of the price paid.

Investors in these funds are generally other institutions (including banks, insurance companies and pension funds) or high net worth individuals, nearly all

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